Digital is the Key to Resilience, Amid Uncertainty: Arun Nayyar, CEO, NeoGrowth Credit

Mr. Arun-Nayyar, Neo Growth Credit Pvt Ltd.

Year 2020 brought extra-ordinary challenges and industries across the world witnessed unprecedented circumstances with economic, social, and business disruptions like never before. The financial institutions, in particular, had to undergo a lot of quick transformations in a bid to ensure business continuity. To understand how this pandemic affected the NBFCs and what integrations and deployments were made, Elets News Network (ENN) interacted with Arun Nayyar, CEO, NeoGrowth Credit Pvt Ltd. During the conversation, Nayyar how NeoGrowth’s digitally integrated operations helped the company during COVID times. He also spoke about the Sanjivni initiative that assisted the small businesses to survive the toughest challenges in their entire existence with solutions tailored.

Excerpts of the interview:

1. How is NeoGrowth dealing with the challenges brought in by Covid? How did it help the company in accelerating its digital transformation?

2020 has been a year of extraordinary challenges. We witnessed unprecedented circumstances with economic, social, and business disruptions like never before. FY 2020-21 saw us follow a three-pronged well-calibrated strategy. First, gearing up to fight the pandemic and focusing on business continuity. Second, embracing the ‘new normal’, modifying our business processes and operations to suit the changed scenario. Third, supporting our customers and getting their businesses back on track, with a sharper focus on recovery and growth.

At NeoGrowth, we were already equipped with digitally integrated operations in pre-COVID times. We have state-of-the-art technology across different processes for integrating business operations moving towards a completely seamless digital experience for customers, where the entire process flow – beginning with lead generation to loan origination, sanction, disbursement, and collections are all taken care of digitally, with minimal human intervention.

Our digital capabilities were further accelerated by the COVID-19 pandemic, and we continued to provide our customers the ease of doing business with complete transparency, amid challenging circumstances. With a customer-first approach, we launched the Sanjivni initiative to help small businesses survive the toughest challenges in their entire existence with solutions tailored to their needs. We rolled out a purely digital and instant approval loan called NeoCash Insta which is an extremely light-weight product with disbursals within 24 hours. During the pandemic situation, we catered to a new segment of SMEs which sell on online marketplaces, through the launch of a limit-based product, Online Seller Finance.

Our very own research study conducted last year after the first wave of COVID revealed that about 40% of retail businesses in apparel, grocery, supermarket, FMCG, consumer durables, spa and salon, and cosmetics segments have shown inclination towards going digital. In order to strengthen our value proposition to customers, we went one step further and built a digital platform, DiGibizz, to cater to the integrated business needs beyond just financing requirements. DiGibizz is an innovative digital platform, catering to the emerging requirements of small businesses. It assesses the businesses on the digital parameters of discovery, fulfillment, transaction, operation, and engagement. Based on the assessment, our proprietary algorithm provides a scorecard, evaluates the score, and provides recommendations for improvement, which connects to our business goals. This is a unique initiative, which helps customers to grow their business digitally.

2. Your company recently launched NeoCashinsta loan. How is it helping the retailers amid the pandemic?

NeoCash Insta is a digital small ticket collateral-free business loan with instant approval within 2 minutes and disbursal to a bank account with 24 hours. The product was developed as an insight from the company’s flagship retailer outreach program ‘NeoGrowth Sanjivini’. The product is meant for retailers and proprietorship companies, to provide them access to quick funds for working capital, purchase of goods, etc.

NeoCashInsta provides a differentiated experience to small businesses through additional features like minimal Documentation (No Financial or Banking Statements required), daily Repayment of just Rs 250 and simple digital application. The most defining element of this offering by NeoGrowth is that the loan applications will be approved instantly without the need for any bank statement, any industry-first feature. Not only has this reduced the hassle for small business owners through an end-to-end digital delivery in these pandemic times but it has also ensured that funds are disbursed to the customers bank account within 24 hours, enabling retailers and sole proprietors to fulfil their urgent working capital and business needs.

Also Read: NeoGrowth–Digitising the MSME Lending Space

Small business owners can visit the NeoGrowth website and get immediate approval for the loan by filling in only the basic details. Exhaustive digital checks for underwriting and usage of digitally verified alternate sources of data is used to ensure risk mitigation and governance.

3. How are the product & services launched during Covid helped the company in reaching the customers better? How is ensuring the accomplishment of business goals?

The company as per RBI guidelines has offered Sanjivni Scheme (RBI Resolution Framework) to ease the debt burden for certain merchants through tenure enhancement or moratorium period based on the Covid impact on their business and Cashflows. This is to ensure that the merchants get enough time and support from our side to rebuild and strengthen their business without worrying about their repayments due in these difficult times.

We have launched NeoCash Insta – a digital small ticket loan with instant approval for faster turnaround and provide timely financing to these small businesses with immediate working capital requirements. In Sep’20, NeoGrowth introduced an Express version of Vendor Finance loan product, which is a faster, leaner, and simplified version of supply chain financing solution for suppliers of large corporates. This product is digitally enabled where a loan application is processed with an automated scorecard-based decisioning, resulting in disbursals within 48 hours. It caters to MSMEs with a minimum business vintage of three years and supplying to large corporates. Moreover, the product is extremely document light with no demand for invoices as part of documentation hence, making the application process hassle-free for the suppliers.

In Dec’20, we also launched a partnership driven, limit-based loan (Online Seller Finance) for businesses selling online on e-commerce marketplaces. We have also initiated co-originated loans with other NBFC partners for offering better loan terms to our customers. Our partner would get access to an underserved retail market segment, which they are not able to service currently, and we would be able to scale our business. We have already tied up with few of the largest NBFCs and would be actively partnering more PSUs and private banks in the coming year.

During the pandemic situation, we have also gone above and beyond and partnered with our customers to digitally transform their businesses with the help of customized solutions. The COVID disruption made all the businesses realize that to sustain and thrive in these challenging times can be a lot smoother with digitalization. However, many customers lacked the preparedness. We undertook a primary research to understand the key pain points of small businesses with regards to digitalisation. These included:

  • Lack of awareness of various digital solutions
  • Threatened by technology, big brands, e-commerce players
  • Limited reach of the business curbing the potential market size
  • Inefficient inventory management leading to delays and business loss

Based on these learnings, we conceptualized and launched a digital platformDiGibizz in Feb’21 helps small businesses to transform and digitize their business, by providing them a Digital Readiness Score (namely Digit-o-meter) along with a host of recommendations on the “hows” and “what” to do to grow their business digitally. The platform also connects these small business owners with an ecosystem of partners which specialize in providing a plethora of services and products for SMEs.

Also Read: How disruption in lending benefiting MSMEs?

In the spirit of our customer centricity business philosophy, multiple digital modes for repayment has been extended to the customer with the help of technology, enabling them to choose whichever is most convenient for them. We are also investing in digital and zero-touch models to take advantage of the increased technology adoption by MSME customer segment.

4. How are you re-strategizing 2021 amid the second wave and scare of the third wave in line?

With the second wave of pandemic intensifying the situation and periodical lockdowns, the business environment is quite uncertain. While this impacts our customers i.e. consumer-facing retail businesses, this poses a business risk not just for NeoGrowth, but for all NBFCs lending to such businesses. While there is a certain amount of volatility in the business in the short term, the impact would be lesser than before as the first COVID wave caused many small businesses to shut shop and most of our book now comprises businesses with robust repayment behaviour. Our prudent risk management, strong liquidity buffer and good governance will enable us to grow sustainably for the long term. Our diversified customer selection strategy, powered by technology, especially data and analytics will help us reach out to more customers and address their financial requirements at this critical hour of need.

mouse
mouse

The Banking & Finance Post is an initiative of Elets Technomedia Pvt Ltd, existing since 2003.
Now, Elets' YouTube channel, a treasure of premier innovation-oriented knowledge-conferences and awards, is also active. To Subscribe Free, Click Here.

Get a chance to meet the Who's who of the NBFCs and Insurance industry. Join Us for Upcoming Events and explore business opportunities. Like us on Facebook, connect with us on LinkedIn and follow us on Twitter, Instagram & Pinterest.